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In a stunning move, IUPUI has decided to close the University Place Conference Center and Hotel on West Michigan Street and will use the space for student housing, dining and classrooms.

The conversion will begin in December. The decision stems from a string of operating losses totaling $1.8 million in six of the last seven years “due in large part to a weak economy,” university officials said in a statement.

Indiana University owns the hotel and invested $13 million to renovate it just seven years ago. It has 278 rooms, making it the Indianapolis area's 14th-largest hotel.

The conference center and hotel employ 150 people, many of whom are likely to lose their jobs. The hotel and center are operated under contract with Rye Brook, N.Y.-based Flik Hotels and Conference Centers.

“We are proud of the role the campus has played in fostering a thriving convention and tourism business in central Indiana, IUPUI Chancellor Charles R. Bantz said in prepared statement.

“But new uses of the facility have been identified that will better support critical campus needs and our goals of quality learning environments, student retention and graduation.”

He said campus housing is at capacity, with more than 200 students on a waiting list.

The conversion, to be completed by the fall of 2013, will have housing space for 560 students. It also will house IUPUI’s first dining hall and about 30,000 square feet of classrooms. Classrooms will open in January, while students will occupy residential facilities in the complex in the fall of 2013.

Bantz said IUPUI has been studying the conversion idea for about a year.